Diabetes services for NHS patients in England are not delivering value for money - there is poor performance against expected levels of care, low achievement of treatment standards and high numbers of avoidable deaths, the National Audit Office (NAO) has reported.

Moreover, the Department of Health (DH) "does not fully understand the cost of diabetes to the taxpayer," says the NAO. The DH estimates that it increased its spending on diabetes services from £0.9 billion in 2006-7 to £1.3 billion in 2009, but the NAO considers these figures to be "a substantial underestimate, based on incomplete data."  The Office's own estimate is that NHS spending on diabetes services in 2009-10 was at least £3.9 billion, or around 4% of the NHS budget.

DH data shows that only half of people with diabetes received the recommended standards of care in 2009-10, although the proportion has increased from 36% in 2006-7, the report finds. The standards, which were originally set by the DH in 2001, state that people with diabetes should receive, each year, nine basic care processes which can reduce their risk of diabetes-related complications such as blindness, amputation and kidney disease. As well as diminishing quality of life, diabetic complications place a significant burden on the NHS, says the NAO.

The risk of developing diabetic complications can also be reduced if people with diabetes achieve recommended treatment standards to control blood glucose, blood pressure and cholesterol levels. However, the report finds that fewer than one in five people with diabetes are achieving recommended standards for controlling all three of these levels. The DH also estimates that up to 24,000 people die every year from avoidable causes related to their diabetes.

Moreover, there is significant variation in the quality of care received by people in England with diabetes, which cannot be explained by need or spending alone, says the NAO; rather, it is likely to be influenced by the local organisation and management of health services. "The Department's data shows that no Primary Care Trust [PCT] achieved the aim of delivering all nine basic care processes to all people, with the highest Trust scoring 69% and the lowest just 6%," it says.

PCTs' performance in delivering the recommended standards of diabetes care across the NHS has not been managed effectively by the Department, while the NHS lacks clarity about the most effective ways of delivering services and does not clearly understand the costs of treating the condition, says the Office. It estimates that, through better management of people with diabetes, the NHS could save £170 million a year.

Amyas Morse, head of the NAO, pointed out that the DH has failed to deliver diabetes care to the standard it set out as long ago as 2001, and this has resulted in the development of avoidable complications, a high number of preventable deaths and increased costs for the NHS.

"The expected 23% increase by 2020 in the number of people in England with diabetes will have a major impact on NHS resources unless the efficiency and effectiveness of existing services are substantially improved," he warned.

The NAO's report has been welcomed by the charity Diabetes UK, which said it "adds the voice of an authoritative government watchdog" to the charity’s own State of the Natiol 2012 report, published earlier this month, which suggested that diabetes healthcare has reached a state of crisis.

"The fact that the government's own value-for-money watchdog has found that poor diabetes care is resulting in avoidable complications and a high number of avoidable deaths is a damning indictment of the current approach to the condition," said Diabetes UK's chief executive, Barbara Young.

The fact that just half of people with diabetes are currently getting the level of care they need is "a national disgrace," she said, adding that escalating diabetes costs threat to wreck the NHS budget, "so this is an issue that affects all of us, not just people with diabetes."